Buy-to-let mortgage rates remain low despite market meltdown warnings
Saturday 16 April 2016
Mortgage lenders are ignoring warnings over a market meltdown triggered by Osborne's new rules by continuing to keep rates down.
The providers are clearly not concerned by the doom and gloom that was predicted to descend with the introduction of the stamp duty increase at the start of April, or the threat of tax relief cuts looming in the future.
And one expert suggests the threat of the sweeping changes in recent months has kept the rates down, which shows no sign of relenting for the moment.
Product manager at mortgage broker London & Country, Peter Gettins, said: "Over the last few months, certainly before the stamp duty change came in, there was definitely the consideration that there’s a bit of an opportunity to be had, so that increased competition will have pushed lenders to cut rates.
"There is still a lot of appetite for buy-to-let from lenders, it still represents in most cases very good risk lending."
In the weeks before the new stamp duty came into force, there was a huge surge in the number of properties being sold in a bid to avoid the new levy.
In fact, one estate agency said that half of the homes sold in the final two weeks of March were snapped up by landlords in the buy-to-let sector.
Stricter buy-to-let lending rules will have an effect
But there are warnings that good times will not continue indefinitely.
Finance expert at Moneyfacts, Charlotte Nelson said: "While the current pressures on the market are not yet causing rates to rise, borrowers should remember that they will now be facing tighter lending rules, including stricter affordability checks, so it is even more important for potential landlords to seek financial advice to see if buy-to-let really is the right option for them."
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